Commercial investment mortgages are designed for individuals and companies purchasing a business property as an asset, profiting from rents and property value appreciation.
Typical examples of when a Commercial investment loan would apply would be shopping centers, Industrial Estates, Agricultural Land, Office Buildings and mixed use properties.
On Commercial Investment Loans the lender looks at 2 main areas:-
- The caliber of the tenant. This determines the yield and thus the value of the asset.
- The security of the individual or company taking the loan out. A personal guarantee is often required as security for the lender for part of or all of the loan.
Lending on these loans are typically set on a margin above bank of England base rate and loans are generally available up to 75% Loan-To-Value.
The Financial Conduct Authority does not regulate commercial mortgages.